Country-by-Country (CBC) Financial Data Reporting

What's New?

 
01 December 2017 - Extension of Submission of Country-by-Country Report Returns
Extension has been granted to taxpayers with Country-by-Country Report returns due in December 2017 or January 2018 to submit their CbC Report returns (including Local and Master files) by 28 February 2018. For more information, see our Guide on How to complete and submit your Country-by-Country information.
 

What is it?

Corporates and connected persons such as groups of companies, trusts, partnerships or natural persons and Multi-National Entities (MNEs) present some complex compliance risks.
 
To close the gaps and address the mismatches between the tax systems of multiple countries the Base Erosion and Profit Shifting (BEPS) Action Plan was adopted by the OECD and G20 countries, including South Africa, in 2013.
 
The OECD / G20 BEPS project provided the ambit for the development of Country-by-Country (CbC) reporting. CbC reporting requires MNE Groups to report on their operations in every country that they operate in. These reports will enable revenue authorities to assess transfer pricing risks and other BEPS related risks with respect to the MNE Groups operating in their countries. 

How does it work?

On 23 December 2016 regulations specifying the changes to the CbC Reporting Standard for MNE Groups specifically required for South Africa’s circumstances, were published under the Tax Administration Act, 2011. The South African CbC Regulations were closely modelled on the legislation related to CbC reporting published in the BEPS Action 13 (2015) Final Report.  In addition a public notice under section 25 of the Tax Administration Act requires the filing of the CbC Reports, master files and/or local files. SARS will be able to receive and exchange information provided in the CbC Reports, master files and/or local files with other jurisdictions.  

Who is required to report on their operations?

  • The Ultimate Parent Entity (UPE), resident in South Africa, of an MNE Group with a total consolidated group revenue of R10 billion or more during the Fiscal Year immediately preceding the Reporting Fiscal Year, as reflected in its Consolidated Financial Statements for such preceding Fiscal Year, is required to file a CbC Report (CbC01), master file and local file
  • Any MNE Entity with potentially affected transactions for the year of assessment, without offsetting any potentially affected transactions against one another, that exceeds or is reasonably expected to exceed R100 million, is required to file a local file and may also be required to file a master file.
The Ultimate Parent Entity or other MNE Entity must submit the required information as stipulated in the Business Requirements Specification (BRS): Country-by-Country and Financial Data Reporting. Local filing of a CbC Report (CbC01) by others members of an MNE Group is required in the circumstances as described in Article 2(2) read with Article 2(3) of the CbC Regulations. A list of countries that have a current International Agreement in place with South Africa but do not have a Qualifying Competent Authority Agreement in place for purposes of Article 2(2) is available on the link provided. The OECD website can be accessed for regular updates as jurisdictions activate their bilateral exchange relationships for CbC reporting

What is the due date for submitting returns?

A UPE or other MNE entity that must file a CbC Report, master file and local file must file no later than 12 months after the last day of the Reporting Fiscal Year of the MNE Group. Notifications in terms of Article 3 of the CbC regulations for filing the CbC reports must be provided to SARS by the same date. No extension has been granted in respect of the notifications. The notifications must contain the information required in terms of Article 3 but no specific format has been prescribed for the notifications. The notifications must, until further notice, be forwarded to: Bus_Sys_CDSupport@sars.gov.za.
  
An MNE entity that must only file a local file (and master file) must file no later than 12 months after its year of assessment.

How to submit a return?

The CbC01 form is now available for electronic submission on the SARS eFiling platform using the CbC link. The CbC link is available on the eFiling platform. As mentioned the reporting requirements are stipulated in the BRS which also contains the requirements pertaining to the CbC01 form, master file and local file.
 
The master file and local file will have limitations in term of the size to be transmitted.  Each file should not exceed 5MB and combined files will be limited to 100MB per submission.  All documents will be converted to PDF when they are transmitted. 

How will the exchange of information take place?

The CbC Report will be saved on the SARS system for SARS use and transmission to other tax jurisdictions in terms of the Multilateral Competent Authority Agreement (MCAA) and bilateral Competent Authority Agreement. See the list of signatories to the MCAA.
 
On request from other tax jurisdictions, components of the master file and local file will be exchanged with such tax jurisdictions under treaty. 

Need Help?

Should you need more help, please send an email to Bus_Sys_CDSupport@sars.gov.za.
 
 
Last Updated: 11/12/2017 8:55 AM     print this page
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 Top FAQs

Who is required to report?
The Ultimate Parent Entity (UPE) of a group must file a CbC Report return if: •it is resident of South Africa for the tax purposes; and •the total consolidated group revenue amounts to R10 billion or more for the previous Reporting Fiscal Year.

What format must the return be in?
The return must be in the format specified in the Business Requirements Specification (BRS): Country-by-Country and Financial Data Reporting. The BRS can be found on the SARS website.

Must members of MNE Groups notify SARS of who will file?
Yes, Article 3 of the CbC Regulations stipulates the notification requirements as follows: – •Any entity that is a member of an MNE Group and is resident in South Africa for tax purposes must notify SARS if it is the UPE.

Should non- residentUPEs of MNE Groups file the notifications under Article 3 of the CbC Regulations?
No, notification would not be required, since the UPE would not be a resident in South Africa.

What are the filing obligations of an entity w.r.t submission of returns for CbC Report, Master File and Local File?
The Reporting Entity (i.e. MNE Group’s UPE that is resident in South Africa or the Constituent Entity filing under Article 2(2) of the CbC Regulations) must file a CbC Report return in South Africa.